Let's Talk Financial Aid

If college costs so much money, how does anyone afford to go? For most people, the answer is financial aid. The United States Department of Education offers every student applying to college the opportunity to apply for money to go towards tuition, books or living expenses. Colleges, universities and private organizations can also contribute awards and scholarships to eligible students to help cover college costs.

Financial aid can make a big difference for many students trying to make college an affordable reality. In fact, many four-year colleges and universities in our region provide substantial scholarships to graduates of the Rochester City School District that may cover the full cost of attending.

Please see below for valuable information about financial aid in our four main sections:

Where Do I Begin?

The first and most important step towards accessing available scholarship money is to file a Free Application for Federal Student Aid or FAFSA with the U.S. Department of Education.

This form gives eligible students access to all federal, state, and college-sponsored financial aid available, both scholarship and grant awards. It is critical to fill out and file the FAFSA form every year. Students must fill out and file a FAFSA form before their first year of college and then again every year they plan to attend college.

Aid is distributed on a first come, first serve basis so getting your FAFSA completed early is especially important!

Types of Financial Aid

The three main types of financial aid are scholarships, grants and student loans. Below are explanations of each, along with some great resources to use here in Rochester.

Scholarships Hundreds of thousands of scholarships are available for college-bound students every year from schools, organizations, private companies, nonprofits, communities, special interest groups and many other associations and institutions. Most scholarships are merit-based and require specific eligibility or set qualifications for eligibility. Some of these include where you live, your areas of interest, your individual circumstances, where you want to go to college and what you want to study. For example, there might be a scholarship for graduates of Wilson High School who want to study Engineering.

Scholarships fall within a huge financial range. Some smaller awards might help cover your college expenses while other academic and athletic scholarships can finance the entire cost of a 4-year college or university, easily topping $75,000. The best part about scholarships is that they are gifts; that is, unless you violate terms of the scholarship, they do not have to be repaid.

The Rochester Area Community Foundation here in Rochester is an excellent resource for college-bound students to investigate local scholarship opportunities. Last year, 462 scholarships totaling $673,710 were awarded to help students in the greater Rochester region reach their academic goals, according to the Rochester Area Community Foundation. For a full list of scholarships please visit RACF's scholarships website. A few examples are listed below:

STEM Scholars (formerly The Minority Science Scholarship) Rochester City School District seniors who plan to attend college and pursue a STEM concentration (science, technology, engineering or math) are eligible to compete for this $1,000 award per year, renewable for up to four years.

William E. McKnight Memorial Scholarship (Urban League Black Scholar) Graduating Urban League Black Scholars from Monroe, Wayne, Livingston, Ontario, Orleans, and Genesee Counties who exemplify the characteristics of William McKnight—the capacity for high-quality intellectual work and a depth of understanding and personal insight into people of all backgrounds—are eligible to compete for this award of up to $2,500 per year, renewable for up to four years.

Elizabeth and Eric Rennert Family MCC ScholarshipRochester City School District seniors who plan to attend Monroe Community College are eligible to compete for this award of up to $1,000 per year, renewable for up to two years.

The University of Rochester's Rochester Promise Scholarship offers $25,000 per year scholarships to RCSD graduates who meet its admission requirements.

Another great online resource from CollegeStats.org lists a variety of scholarship opportunties for minority students (based on race, gender, sexual orientation, etc.) Find that here.

Investigating local and private scholarships — in addition to filing a FAFSA form for Federal and State aid — is essential for students seeking the best way to pay for college.

Grants Grants, like scholarships, do not have to be repaid and are therefore highly sought-after for college students. Unlike scholarships, grants are mostly need-based or based on individual financial needs.

The U.S. Department of Education offers eligible students four types of grants dependent upon your financial need, military service or educational goals. You can read a little about each type on the Department of Education's Student Aid website.

A major source of grant money for students in New York State is the Tuition Assistance Program or TAP grant. This grant helps eligible New York State residents pay tuition at approved schools in New York State and can total over $5,000 per year.

There are many grants available to college-going students but they can be difficult to find. A good resource for finding grants is the GoCollege website where students can search by subject, location and types of need.

Student Loans College students graduating from New York State four-year colleges in 2012 graduated with an average of $25,537 in college loans (from projectonstudentdebt.org). Around 60% of all students graduated with at least some debt. Nationwide, Americans have racked up more than $1 trillion dollars in student loan debt.

Taking on student loan debt is necessary for many students. The risk comes when you take on more than you need or more than you can easily pay back. There are many different kinds of student loans that may be offered but all fall under two general categories: Federal Loans and Private loans. Federal loans are available through government programs at lower interest levels than private loans. Private loans are offered through banks and other financial institutions.

Federal Loans Federal loans are the best source of loans for most students because they have lower interest rates than private loans, more flexible repayment plans, don't require you to have a co-signer and may be forgiven by the federal government if you meet certain conditions. This means that it will cost you less to borrow money. Below are the explanations of the most common loans for undergraduate students from the U.S. Department of Education.

The Federal Direct Loan Program is the largest federal student loan program. In this program, the US government acts like a bank and loans you money. There are two kinds of loans for undergraduate students. You may take on $5,500 to $12,500 per year in Direct Subsidized Loans and Direct Unsubsidized Loans depending on certain factors, including your year in college.

Direct Subsidized Loans are based on financial need

Direct Unsubsidized Loans are loans with eligibility not depend on financial need

The Federal Perkins Loan Program is for students with exceptional financial need. In this program, the school you attend lends you money. Up to $5,500 per year in Perkins Loans depending on your financial need, the amount of other aid you receive, and the availability of funds at your college or career school.

Private Loans Many students take out private loans when the amount of Federal loans they have been offered does not cover the cost of attending their school of choice. Most private loans will require students to have a co-signer who is, most of the time, a parent or other family member. They are likely to cost more over time than Federal Loans due to higher interest rates and may offer less flexible repayment options. If you must take out a private loan, please investigate your options first. Different lenders offer different interest rates and repayment options.

Your financial aid package will most likely have a mix of grants, loans, scholarships, and other assistance based on the anticipated costs of attendance you will have. Scholarships may be based on your grades, your financial need, participation in programs or athletics, or other factors.

You may be offered more than you need in your financial aid package. You do not have to borrow all the money that is offered. Remember, you'll need to pay it back! That is why it is important to make a budget. Depending on the interest rate on your loans, taking out a little more than you need now can mean paying back a lot more in the future.

Understanding your college options can be complicated. Knowing what to look for, figuring out what you can afford and understanding the application process can be difficult. Exploring all of the options available to you, seeking out people who can help and keeping an open mind are essential tools to making an informed and confident college choice.

Paying Funds Back

The bad part about a loan is that it is something you'll need to pay back. Most students (71% of students graduating college in 2012) graduate with at least some student loan debt. Paying back loans is a little different for everyone depending on their particular loans. The best way to pay back your loans is to fully understand them. Contacting your loan servicer(s) before your loans are due is the best way to understand what your monthly loan payments will look like and what your options are.

Typically, repayment begins six to nine months after graduation, drop out, or drop below half-time student status. Most students choose to repay their loans on a ten-year repayment plan (least amount of accrued interest) but many plans can last up to thirty years (the most accrued interest). There are also many more options for repayment:

Graduated Repayment You can choose a graduated plan which means paying less at the beginning and then paying an increasing amount as time goes on. The thought behind this plan is that you will make less money directly out of college and steadily gain more and more as you gain more experience and better jobs.

Income Driven Repayment For students with lower income, an income-driven plan is a good option. In these plans, your loan servicer will work with you to arrive at an amount you can afford. Under certain circumstances, the federal government may eventually forgive the debt after a number of years though you may end up paying more in interest.

Student Loan Forgiveness For most students, getting their loans forgiven would be a wish come true. There are a number of ways that this is possible depending on your profession. If you are interested in learning more about what professions are eligible for student loan forgiveness, click here.

Consolidation Many students have loans from more than one provider. One option to avoid this confusion is to consolidate your loans in to one big loan serviced by one provider instead of many smaller ones. Additionally, you may be able to get a lower interest rate this way.

Paying back your student loans can be confusing, but by understanding your options and understanding your debt, you can be in control of your financial future. It is impossible to plan for everything. If you experience a hardship such as loss of a job or medical problem, you can work with your loan servicer to find a plan to avoid getting behind on your payments. The important thing to remember is to pay what you can and talk to your provider if you run in to difficulties.

Online Resources

Here is a list of trusted sites to help you with paying for college. Unfortunately, there are some scams and bogus websites that offer assistance with financial aid but may steal personal information and try to get you to pay for services that are actually free: